AUSSIE BONDS: ACGB Dec-34 Auction Result

August S&P Global manufacturing PMIs for ASEAN released today were all in growth territory signalling stronger growth in activity in the month. Also confidence in the outlook improved as uncertainty around global trade began to ease in July. The ASEAN aggregate is released on Wednesday. Thailand was the outperformer amongst the countries printing today with the PMI rising to 52.7 from 51.9 and Indonesia returned to growth at 51.5 after 49.2. Political turmoil in both could impact the next print.

• Thailand’s increase in manufacturing growth to its highest in over a year was driven by higher domestic new orders while export orders fell for the first time since April. This drove destocking and increased purchasing activity but staffing levels were stable due to resignations rather than an unwillingness to hire. Business confidence rose to its highest in close to two and a half years due to new products and business expansion, according to S&P Global.
• Thai cost inflation fell slightly due to discounting but it was passed onto customers driving a moderate increase in selling prices.
• Indonesia’s manufacturing sector returned to growth for the first time since March as higher production and orders, both domestic and export, drove a pickup in hiring and purchasing. Input cost inflation was driven higher by increased imported inflation from a stronger USD and was passed on driving selling price inflation to its highest since July 2024.
• The Philippines manufacturing PMI was little changed at 50.8 but confidence reached a new 2025 high. There was a small rise in orders but external demand was its highest since the start of 2025.

ASEAN S&P Global manufacturing PMIs sa

Source: MNI - Market News/Bloomberg Finance L.P.

FX positioning shifts, per CFTC, were once again mixed in the week ending the 26th of August (last Tuesday), see the table below. 

• On the leveraged side, there was very little net change in the majors, with modest JPY, EUR selling, but some GBP buying. AUD and NZD also saw some buying in the leveraged space, with NZD almost back to a net long position. The other standout in this space was the addition of net longs for MXN.
• On the asset manager side, longs in EUR and JPY were added to, but mostly net selling was evident elsewhere. GBP and AUD shorts were added to, likewise for CAD.   
• These mixed trends reflect broader USD moves, where aggregate indices remain within recent ranges. Asset managers prefer JPY and EUR over the USD though, which has been a consistent theme for a while. AUD shorts may also be challenged if we can push above 0.6600. 

Table 1: CFTC Positioning Change & Outright Position By Major Currency 

Source: Bloomberg Finance L.P./MNI 

The S&P(ESU5) overnight range was 6455.50 - 6513.00, SPX closed -0.64%, Asia is currently trading around 6489, +0.25%. The S&P ended the week poorly after earlier shrugging off multiple headwinds, a combination of the PCE print & month-end flows the likely culprits. The S&P remains in a bullish uptrend, and for the moment is ignoring all headwinds. Month-End selling saw it pullback as we head into September which traditionally is the worst month for US Equity performance, will stocks continue to ignore seasonality like it did in August? This morning futures have opened higher, E-minis +0.25%, NQU5 +0.35%. Market will be eyeing NFP on Friday.

• (Bloomberg) - “The soaring S&P 500 may yield to caution in September — historically the worst month for returns — with a key US jobs report, inflation reading and the Fed’s rate decision on the agenda. Some of Wall Street’s biggest optimists worry the eerie calm is sending a contrarian signal in the face of seasonal weakness.”
• Holger Zschaepitz on X: "This chart from Goldman Sachs highlights the overwhelming dominance of the US. Since the peak before the global financial crisis, US corporate profits have surged by 166% – far outpacing other regions. By contrast, the eurozone has barely moved, with corporate profits up only 8%, a particularly stark underperformance." See Chart Below.
• Lance Roberts on X: “August defied historical return statistics by putting in a roughly 2.5% return. Will September, historically the weakest month of the year, do the same?" 

Fig 1: US Corporate Dominance

Source: MNI - Market News/@Schuldensuehner